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Barbosa, L., Rodrigues, A & Sardinha, A. (2023). Strategic investment and subsidies within an asymmetric duopoly under uncertainty. The 12nd Portuguese Financial Conference.
L. S. Barbosa et al., "Strategic investment and subsidies within an asymmetric duopoly under uncertainty", in The 12nd Portuguese Financial Conf., Madeira, 2023
@misc{barbosa2023_1734883818374, author = "Barbosa, L. and Rodrigues, A and Sardinha, A.", title = "Strategic investment and subsidies within an asymmetric duopoly under uncertainty", year = "2023", howpublished = "Digital", url = "https://pfn2023madeira.pt/" }
TY - CPAPER TI - Strategic investment and subsidies within an asymmetric duopoly under uncertainty T2 - The 12nd Portuguese Financial Conference AU - Barbosa, L. AU - Rodrigues, A AU - Sardinha, A. PY - 2023 CY - Madeira UR - https://pfn2023madeira.pt/ AB - This paper analyzes the effect of revenue and investment subsidies on strategic in- vestment and optimal investment timing within an asymmetric duopoly, whereby two heterogeneous firms have different maximum capacities, marginal costs, and invest- ment costs. Within this market, a firm optimally decides whether to be a leader or a follower and the optimal quantity to produce. In addition, firms can be active or idle after investment. An interesting finding from our analysis is that the subsidies accelerate investment when a market has an incumbent firm and the other firm has the option to invest. When both firms have the option to invest, we observe differ- ent equilibria and investment triggers’ slopes as the revenue and investment subsidies change. ER -